4 things you must know during real estate purchase
Four things you need to know during a real estate purchase process in Serbia
You have concluded a purchase agreement or purchase pre-agreement of real estate. Whether you are a seller or a buyer, by this contract you have committed yourself to fulfilling a series of obligations within the prescribed deadlines. However, as much as the contract seems clear, there are plenty of risks that each contracting party need’s to manage during the process of real estate purchase.
What if the other party does not fulfill its obligation?
If at the time of concluding the contract the buyer gave the seller a certain amount of money (down payment) as a factual confirmation that the contract is concluded, which has become an indispensable practice in real estate contracts, and which is stated in the contract itself, and the buyer fails to fulfill its contractual obligation, the seller may request performance of the contract, if that is still possible. The seller has the right to keep the down payment, to seek compensation for damages if the damage to the seller occurred on that occasion, for an amount exceeding the amount of the withheld down payment.
If the seller is responsible for the non-performance of the contract , the buyer may request the performance of the contract, if this is still possible, or request the return of double the amount of the down payment (double down payment). The buyer may also request the return of the down payment with compensation for damage if such damage occurred to the buyer.
Both parties can agree on the regulation of mutual relations in case of termination of the contract and have the right to judicial protection in case of non-fulfillment of legal and contractual obligations. In the event that the contract cannot be performed without the possibility of attributing responsibility to either party, each party shall return what it has received so far.
What if the buyer is not granted with a housing loan?
The answer to a seemingly simple question is more complex than it seems at first glance. From the point of view of potential consequences for the buyer, the answer depends on whether the refusal for the housing loan followed after the conclusion of the pre-agreement or after the conclusion of the real estate purchase agreement. Also, it is necessary to perform an analysis of the entire contract in order to establish the determining factual circumstances on the basis of which a specific legal relationship could be determined and provide exact answers in order to resolve the legal situation.
However, in case there is room for an agreement between the contracting parties, there are legal modalities on the basis of which such a stressful and undesirable situation can be overcome with minimal risks.
Can the seller make alterations to the apartment?
In the event that nothing is agreed upon the alterations, the answer to that question depends on which alterations were made, at what time and with which intention, as well as whether the circumstances that led to the alterations were known to the buyer. The legal possibilities of the buyer in that case will depend on the answers to the mentioned questions.
Alterations that the seller can make until the moment of handover of the real estate without any potential consequences for him are alterations made in order to prevent the loss of property or the occurrence of significant damage that would reduce the value of the real estate.
In a situation when real estate is bought from housing loan funds, the seller, as the pledgee, undertakes by the pledge statement that he will not make any changes to the real estate without the written consent of the mortgagee (bank), and which later applies to the buyer until the moment of final repayment of the housing loan.
Accidental ruin of real estate
The seller is responsible for the accidental ruin of the property until the moment the buyer takes possession of the real estate. That moment can occur both before and after the full payment of the purchase price of the real estate, depending on the needs and agreements of the seller and the buyer.
Which is the best way to prevent unwanted situations?
By concluding a complete and comprehensive real estate purchase agreement, which will cover all aspects of the purchase relationship. Every contract, including the purhcase agreement, must have clearly and precisely defined contractual provisions, to start, a precise designation of the real estate that is the subject of the sale. A deadline for fulfilling each contractual action must be defined. In addition, appropriate sanctions need to be defined for non-compliance with contractual provisions. The contractual relationship must be set as precisely as possible, in order to avoid the possibility of interpreting a situation in different ways, and in order for the contracting parties to avoid such disputes being ultimately interpreted by the court. It is necessary for the contract to bring a balanced legal framework for the sale, which will provide both the buyer and the seller with security in the favorable conclusion of the sale procedure. Any deviation from such a balance should have a justifiable reason.
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